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A new farm program that adds to crop insurance coverage

Agriculture.com Staff 05/13/2008 @ 8:15am

One of the few programs that could affect crop producers this year IF a new farm bill becomes law over President Bush's expected veto is the permanent disaster program. It covers crop years 2008 through 2011.

That's a big IF, of course. The House, which could vote on the bill this week, passed its own version last year along mostly party lines, by a vote of 231-191, That's far short of the two-thirds needed to override a veto. The Senate passed its farm bill by a comfortable 79-14 margin. But the tax issues that kept House Republicans from voting for the bill last summer may have been resolved enough for many to support the final bill this time. On Monday, some last-minute questions about the five-year cost of the farm bill were holding up its final release by the conference committee.

So, IF the law takes effect yet this year, farmers will need to learn yet another farm program acronym: SURE.

SURE stands for SUpplemental REvenue (SURE) Assistance Payments.This is the permanent disaster program that generated a lot of debate during the writing of the Farm Bill. At times it pitted Corn Belt members of the agriculture committees against those from the Great Plains, where crop insurance and other safety net programs haven't always worked well for wheat farmers facing multiple years of drought.

SURE differs a lot from disaster aid bills passed in recent years, says Tom Buis, President of National Farmers Union, the farm group that put permanent disaster aid at the top of its farm bill wish list.

"The assistance goes only to those producers who can demonstrate a loss, not if you're in a county or an adjacent county that has a loss," Buis told Agriculture Online recently.

In the past, if you were in a county declared a disaster by the Secretary of Agriculture, you could get paid if you had losses in certain fields even if your entire farm had no loss in revenue. And you might not have had to buy crop insurance before being eligible for disaster payments.

Under the Farm Bill's new disaster program, a congressional staffer explained to Agriculture Online in an e-mail message, "SURE Assistance requires a producer to be in a Secretarial declared disaster or contiguous county... If [producers] purchase minimal coverage with the Sure Assistance program, disaster assistance will be minimal as well. In reality, this program pushes producers to greater reliance on crop insurance than any prior disaster program."

The new program calculates all of a farm's expected revenue, including that from noninsurable crops. And you must buy at least low-value CAT (catastrophic) coverage to get disaster payments.

One congressional staffer familiar with the program says that those who bought only the virtually free CAT coverage in the past won't benefit much more from the new program. (CAT is 50% of actual production history, or APH, times 55% of the USDA's insurable price.)

"50% X 55% X 115% results in protection levels at approximately 31.5% coverage assuming the producer insures his/her entire farm at CAT levels," the staffer explained. "Clearly, SURE will mean CAT insured will need to seriously evaluate 'buy up' coverage if they want the security of disaster coverage."

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